SMALL BUSINESS ADMINISTRATION NEW YORK DISTRICT OFFICE NEW YORK, NEW YORK and LOCAL 3134, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO

In the Matter of

SMALL BUSINESS ADMINISTRATION

NEW YORK DISTRICT OFFICE

NEW YORK, NEW YORK

Case No. 00 FSIP 46

and

LOCAL 3134, AMERICAN FEDERATION OF

GOVERNMENT EMPLOYEES, AFL-CIO

ARBITRATOR'S OPINION AND DECISION

The Small Business Administration, New York District Office,
New York, New York (Employer or SBA) filed a request for assistance in a dispute
arising from negotiations with Local 3134, American Federation of Government
Employees, AFL-CIO (Union), over the Employer’s proposal to discontinue
providing bottled water at the New York District Office. After due consideration
of the request, the Federal Service Impasses Panel (Panel) determined that the
impasse should be resolved through a mediation-arbitration procedure before the
undersigned.

Accordingly, a mediation-arbitration hearing was held on
March 29, 2000, at the Employer’s place of business, 26 Federal Plaza (the
Federal building), New York, New York. Despite efforts made to mediate a
voluntary resolution, the parties were unable to reach agreement on the
outstanding issue. When those efforts ended, a brief hearing was conducted
during which the parties presented their final offers and a summary of
supporting evidence and arguments that had been discussed at length during the
mediation phase. Both parties declined the offered opportunity to submit
post-hearing statements.

BACKGROUND

The Employer’s mission is to guarantee loans to small businesses. The Union
represents a bargaining unit of 30 to 40 employees, who are part of a nationwide
unit of about 3,400. Most bargaining-unit employees hold positions as
specialists in loans, business opportunities, business information, and loan
processing, and as economic development assistants and clerical workers at
grades GS-1 through GS-13. The parties are covered by a master collective
bargaining agreement (MCBA) which is to remain in effect until August 27, 2002.

The SBA’s District Office is located with other Federal agency tenants on
the 31st floor of a 44-story building in lower Manhattan. Some
different SBA offices are located on part of the 33rd floor. The 31st
and several other floors are served by a bank of eight elevators. According to
the Assistant Building Manager,(1)
above the 15th floor, New York City
water is pumped to holding tanks on the 44th floor; from the tanks,
water flows through filtering and chiller systems to drinking fountains on the
higher floors, including those on the 31st floor. The fountains on
the 31st floor were recently replaced.

The parties believe that sometime during 1988, when asbestos was being
removed from the building, the building’s water was found to be unhealthful;
as a result, GSA provided bottled water for employees for a number of months.
When the quality of the water improved, GSA discontinued the service. At that
point, the Assistant Regional Director of the SBA decided to continue to provide
water using appropriated funds because "he liked the water." The
practice continued for over 11 years, until an auditor at the SBA’s
Washington, D.C., office informed the current District Director that the
practice, paid for by appropriated funds, was "unauthorized." In
mid-March 1999, after some negotiations, the Employer discontinued providing
bottled water and the Union filed an unfair labor practice (ULP) charge.
Subsequently, in August 1999, the Employer settled the ULP by agreeing to resume
providing bottled water and, if the Union so requested, to negotiate over
discontinuing the practice. As agreed, the parties engaged in bargaining which
ultimately led to this dispute.

The Employer resumed providing water in late September 1999. Currently, the
Employer rents three dispensers; each has a hot and a cold water faucet and a
small refrigerator in the cabinet beneath where employees store food. Within the
office space, there is also a microwave oven available for employees’ use.

ISSUE AT IMPASSE

Whether and to what extent the Employer should continue to provide bottled
water for affected bargaining-unit employees at 26 Federal Plaza.

POSITIONS OF THE PARTIES

1. The Employer’s Position

The Employer proposes the following:

The Agency is willing to entertain the possibility of purchasing a dorm size
refrigerator (approximately 3' by 2' in size) for the convenience of employees.
The Agency is willing to provide 2 hours of administrative time to the employees
in order to arrange for a voluntary bottled water club.

Under Comptroller General decisions and Federal appropriations law,
expenditures for bottled water are not permitted in circumstances such as these
where tests disclose that the building’s water is potable.(2)
Within the SBA,
only two offices pay for unit employees’ bottled water: In Los Angeles, the
SBA provides water at an office that lacks a water supply; in Hato Rey, Puerto
Rico, the SBA provides bottled water because the tap water is not considered
safe to drink. Otherwise, within SBA nationwide, employees either pay for their
own water or use office water fountains. The same is true for employees who work
for other Federal agencies on the 31st floor and, it is believed,
elsewhere in the Federal building. Since, as the testing indicates, there is no
necessity for continuing to provide bottled water, fairness dictates that the
practice should be discontinued, and affected employees be treated the same as
other SBA employees nationwide.

It is recognized that the cost of providing bottled water is not exorbitant:
Currently, the office spends $1,200 annually for bottled water, $89 for the
monthly bottle deposit, $684 annually for the rental of three dispensers, and
$12.95 per 1,000 cups. Over the 11- or 12-year period, expenses have been about
$24,000, which is not insubstantial in an era of declining agency budgets.
Furthermore, such costs could escalate should the practice continue, and
employees at the other 69 SBA offices seek similar considerations.

Regarding the Union’s concerns about the effect of the change, employees
may use the office microwave to heat hot water for coffee, tea, and hot
chocolate. Furthermore, as the office culture is not restrictive, employees have
the option of going to the 6th floor cafeteria during the workday for
a hot drink if they desire. As an adjustment, a refrigerator could be purchased
and 2 hours of administrative time provided to permit employees to organize a
group water pool. A long phase-in period, however, is not warranted, essentially
because employees have received this benefit for over 11 years even though the
justification actually ceased when GSA stopped paying for the water.

2. The Union's Position

The Union asks that the arbitrator select between its alternative proposals.
They are:

The Agency should continue to provide bottled water to the employees in the
New York District Office until such time as a Government-wide rule or regulation
is put in place prohibiting such a practice; or

A two-year phase out period to coincide with the most recent Master
Agreement. That over this period and time, a bottled water committee be
established to monitor the water situation on this floor. The Agency has
provided bottled water for Bargaining Unit Employees for over 12 years and
because it is an established past practice, the agency should continue to pay
for the rental of coolers and bottled water for the first 6 months of the 2
years. The Union agrees to pay after 6 months 25 percent of the cost of the
water for the remaining year and a half.

In the Union’s view, even though water is available in the building, the
Employer has the discretion to continue to purchase bottled water for affected
employees. The FLRA has found a substantive obligation to bargain in
circumstances similar to those in this case.(3) Continuing the long-standing
practice is justified because convenient access to hot and cold water avoids
more lengthy interruptions in the workday caused by trips to the microwave to
heat water or to the cafeteria for hot or cold drinks. Furthermore, the
employees have come to depend on the convenience offered by the dispensers which
are a fixture in the office. Stopping the practice now, therefore, will have a
negative impact on employees’ morale.

As to the Employer’s position that other Federal offices do not provide
bottled water, it is suspected that employers’ convictions that the practice
is "unauthorized" or "illegal" unfairly convinced employees’
representatives that they could not negotiate to institute or continue such
practices. Furthermore, whether or not other SBA offices provide bottled water
for employees should not determine the result in this case. The circumstances
here are different and justify continuation because the practice has gone on for
so long. Should the arbitrator determine to curtail the practice, given the
factors discussed above, the phase out should be gradual, with employees
assuming a reasonable proportion of the expense for the water.

CONCLUSION

Having considered carefully the parties’ evidence and
arguments, I am persuaded that the dispute should be resolved on the basis of a
compromise solution incorporating a modified version of the Employer’s
proposal. Under the compromise, the Employer’s practice of providing bottled
water is to cease 4 months from the date of this decision. During the 4-month
period before the practice ends, the Union and unit employees should be granted
2 hours of administrative time, upon request, to meet and decide whether they
wish to arrange to purchase bottled water as a group and to work out the details
of such an arrangement. Should 2 hours be insufficient, the Employer may,
workload permitting, grant a request for additional administrative time. If
bargaining-unit employees determine that they would like the Employer to provide
a refrigerator, through their Union representative, they may request and the
Employer shall provide one of sufficient size to store bargaining-unit employees’
lunches, snacks, and drinks. Regarding the quality of water delivered through
the building’s system, the Employer is to request water tests at intervals
permitted under applicable regulations and the lease, and provide the Union with
copies of the results.

In reaching this decision, I have considered that unit
employees are losing a convenience that they have come to expect and enjoy over
a significant period. In these circumstances, a 4-month period, which covers
spring and summer months, seems an appropriate length of time for employees to
work out a voluntary, self-financed arrangement for bottled water.(4) The Employer’s
proposal on administrative time is modified here because it is indefinite and
makes no provision for additional meeting time, if needed. The amenity of a
suitably-sized refrigerator should substitute for the three in the water
dispenser cabinets. The Employer’s proposed wording on a refrigerator is
modified both because it is again indefinite, and to ensure that the appliance
is appropriately sized. The conduct of periodic testing, as permitted under
applicable regulations and the lease, and the availability of test reports,
should be helpful to employees who occasionally or even frequently use the
office water fountains.

Requiring the Employer to maintain the bottled water practice
beyond this relatively short adjustment period does not appear justified. In
this regard, the report provided by the Assistant Building Manager shows that
contaminants in water do not exceed safe levels established by the Environmental
Protection Agency. Neither party provided expert testimony to refute the test
results, nor did the Union conduct an independent test to establish the
necessity for providing bottled water.(5) To the extent that visual inspection of
the water is instructive, the undersigned examined the drinking fountain water
during the procedure and did not observe any obvious discoloration, sediment,
unpleasant taste, or foul odor.

It is undisputed that the overwhelming practice within the
SBA and in other Federal agencies throughout country is that employees either
drink water from the building’s fountains or purchase their own bottled water,
individually or through clubs. These same practices are replicated in agencies
collocated with affected employees on the 31st floor of the Federal
building. At the two offices within the SBA where the Employer provides water,
the water is either unsafe or unavailable. There is no evidence that the lack of
such practices elsewhere, as the Union suggests, is the result of
misrepresentations by other employers on the legality of providing bottled
water. In the event that employees decide not to continue the in-house
availability of bottled water, the Employer indicates that the culture in its
office would be tolerant of employees’ going to the cafeteria or taking
reasonable time to heat water in the microwave.

DECISION

To resolve their dispute over bottled water, the parties shall

adopt the following wording:

The practice of providing cost-free, bottled water shall end 4 months from
the date of this decision. During the 4-month period prior to termination, the
Employer agrees to provide 2 hours of administrative time, upon request, for the
Union and bargaining-unit employees to meet and decide whether they wish to
arrange to purchase bottled water as a group and